That would seem to sum up the Government following their latest u-turn.

The abolition of the 10% income tax rate, and resultant increase in income tax bills for those on low incomes, is about as ill-conceived as Labour taxation policy can get.

Pressure from the media, irate voters and a veritable flock of back-benchers provides us with this latest policy about-face.

The first part in the solution, some sort of additional payment for those aged 60 to 64, would appear to make things more complicated and add in new layers of taxpayer-paid-for paper shufflers. Payments are expected to be rounded up so the beneficiaries could end up in pocket and not out of it.

The claim is that it is easier to process this demographic first.

The pensioner and soon-to-be-pensioner age group, aka the “grey vote”, is the must-suck-up-to demographic. They are quickly becoming the dominant age group and are the most politically active with it. The politicians priority is to keep them sweet, no matter what it does to the country’s finances. They are the people you need to keep on side if you want to try to hang on to power

Demographic Doom at the Ballot Box outlines Philip Booth’s report, ‘The Young Held to Ransom – a Public Choice Analysis of the UK State Pension System’. The conclusion, shifting resources from the young to the old is a trend that is set to continue into the future. The pyramid scheme that is the State Pension being primarily to blame.

This latest example of creating policy on the fly highlights the Government’s staggering ability to waste resources. Their apparent need to add in layers of complexity whilst creating non-jobs for phalanxes of civil servants. It is as if destroying value seems the only way a central-planning-obsessed lumbering leviathan of a Government can think. Why do something simple when you can complicate the hell out of it.

There is an alternative solution to whatever random collection of ideas are being put forward as a band aid to the current fiasco. This solution has negligible administrative expense, some one-time paperwork by Government and employers will be needed, yet still treats all taxpayers fairly and actually means everyone who was not earning in excess of the previous 10% ceiling, £2,230 in 2007/08, actually pays less tax.

Raise everyone’s tax free allowance by half the old 10% tax band.

Simple.

On 2007/08 figures that would be £1,115. Using what would be the 2008/09 figure of £2,320, the increase in the tax free allowance would be £1,160.

Any low-waged worker out there who earns less than £1,160 above the current tax free allowance ends up paying no tax. Up to £116 better off than last year. Up to £232 better off than with what is currently in place.

Anyone low-waged earning above £1,160 and up to £2,320 of currently taxable income is still better off, on a declining scale. They are better off £2 less for every £10 above £1,160 they earn.

For example. The tax savings for the low-waged, earning just above the current tax free allowance threshold would be:

Anyone earning £2,320 or over breaks even. No more tax than if the 10% rate still existed.

As a strategy it makes sense. Unfortunately, it is something which should have been enacted instead of the combo tax-futz of abolishing the 10% rate whilst simultaneously lowering basic rate of tax from 22% to 20%.

The upping of personal allowances is simple. Everyone can understand it. Implementation is easier. It certainly makes more sense than the comedy of errors which has lead the Government to where it is today.

Instead we get more of the same. The removal of excessive amounts of tax from everyone’s income. With the opportunity to get some of it back if you happen to have the lifestyle that the Government approves of or are of a demographic which needs to be kept on side.

If that is not you then, for now, you are left to twist in the wind whilst you continue to pay your unfair share.